We have carried out numerical simulations of three-dimensional non-isothermal flow around an in situ heat-based flow sensor to investigate how formation heterogeneities can affect the interpretation of ground water flow velocities from this instrument. The flow sensor operates by constant heating of a 0.75 m long, 5 cm diameter cylindrical probe, which contains 30 thermistors in contact with the formation. The temperature evolution at each thermistor can be inverted to obtain an estimate of the ground water flow velocity vector using the standard interpretive method, which assumes that the formation is homogeneous. Analysis of data from heat-based flow sensors installed in a sand aquifer at the Former Fort Ord Army Base near Monterey, California suggested an unexpected component of downward flow. The magnitudes of the vertical velocities were expected to be much less than the horizontal velocities at this site because the sensors were installed just above a clay aquitard. Numerical simulations were conducted to examine how differences in thermal conductivities may lead to spurious indications of vertical flow velocities. We found that a decrease in the thermal conductivity near the bottom of the sensor can perturb the temperature profiles along the instrument in such a manner that analyses assuming homogeneous thermal conductivity could indicate a vertical flow component even though flow is actually horizontal. This work demonstrates how modeling can be used to simulate instrument response to formation heterogeneity, and shows that caution must be used in interpreting data from such devices using overly simplistic assumptions.